CORRECTED: GM CEO warns bankruptcy more probable

By IBT Staff Reporter On 04/17/09 AT 1:00 PM

Corrects list of core brands planned for GM in paragraph 3 to include Buick, remove Pontiac

DETROIT - General Motors Corp Chief Executive Fritz Henderson said on Friday the automaker could still restructure out of court, but warned it was more probable GM may need to seek bankruptcy protection to complete that process.

Henderson said the automaker faced no pressure from the U.S. autos task force to make a decision on that front. GM still prefers to restructure outside bankruptcy, but would be ready to file for court protection if necessary, he said.

Henderson also said the automaker still planned to stick to its four core brands that include Chevrolet, Cadillac, Buick and GMC, but was examining all elements of its brand strategy.

He called reports that GM would be dropping one of the core brands speculation.

In the first of what he said would be regular conference calls, Henderson said GM's work with the U.S. Treasury has been like a private equity due diligence process.

GM has been operating under U.S. government emergency aid and was told in late March by the U.S. autos task force that it would have to dig deeper and move far faster in its turnaround plan for that aid, and additional support to come through.

If the automaker fails to complete its turnaround, which includes reaching agreements to make deep reductions in some $28 billion of unsecured debt as well as agreements to cut labor costs and rework the funding of a union healthcare trust, the automaker could be forced into bankruptcy.

In wide-ranging remarks, Henderson said the automaker has reached out to more than six potential investors for its European Opel brand, including financial and industrial parties.

Henderson, who became CEO when the Obama administration ousted his mentor and predecessor Rick Wagoner, oversees a company that posted $82 billion of losses since 2005.